Ron Paul's view on the gold standard, U.S. precious metals based economy
Presidential candidate Ron Paul has long been a supporter of a return to the gold standard for the United States, but a recent column in Forbes shows that he is not the only noted thinker who is championing this concept. The noted business and financial publication are one watched by investors in gold around the world and respected for the insight that columnists like Louis Woodhill, who penned the recent gold standard article, are able to provide readers with. In his most recent column, Woodhill suggested that the last 20 years have both been "lost decades" for the U.S. economy; they've been times when a change has been far lower than expected. Like Ron Paul, Woodhill stated that he believes the issue is tightly bound to the unstable value of the U.S. dollar.
He went on to say, "The total number of people with jobs is now higher than it was seven years ago. Adjusted for inflation (via the GDP deflator), the Dow Jones Industrial Average is 18 percent below where it was at the end of 1999."
This comes hot on the heels of news that Paul himself has actually been doing as he has advised so many of his supporters: investing in gold. Paul is noted for stating that the value of assets such as precious metals is what the Federal Reserve should be basing its ability to print money on. He feels that a stronger U.S. economy means turning to gold and silver as superior foundations for national holdings. Because the presidential candidate had to report his assets to the Federal Elections Commission, the GOP candidate's financial disclosure report showed he has a large portfolio of silver and gold stocks. This is not shocking to many who are familiar with the Texas congressman, but it has gone a long way towards silencing some of his critics.
According to an article in USA Today, Ron Paul's other assets include real estate, cash bank accounts and a portfolio of investments in precious metals mining companies such as Pan American Silver Corporation, Barrick Gold Corporation and Newmont Mining Corporation. Those holding gold and silver assets are likely to view this as a vote of confidence for these types of assets and political pundits believe it could sway those voters this November.
Woodhill backs Ron Paul's optimism, though his article was not of a political nature, citing facts such as the decline experienced since 1973 in the growth of the GDP in the United States. Since 1973, the year the U.S. finally left the gold standard behind, the average growth rate of the economy has been 2.66 percent. Prior to 1973 and all the way back to 1790, the average growth rate of the economy was 3.96 percent per year.
Fiat money, the Forbes columnist pointed out, has brought many downsides that need to be addressed.
"The slower economic growth rate under the fiat money regime has had an enormous negative impact," wrote Woodhill. "If our economy had continued to grow at 3.96 percent real from 1973 on, 2011 GDP would have been 61 percent larger. Everyone’s income would be at least 50 percent higher, and the federal budget would be running a $700 billion surplus, despite our current wildly excessive federal spending."
These shocking statistics certainly lend credence to the concept of returning to the gold standard, but there is no doubt in the mind of any advocates of this return that there would be much opposition to such a change.
Will such a change be possible? Would Ron Paul be the presidential hopeful to bring it about? These and other questions are likely to be the source of much speculation in 2012, say political observers, but only time will tell.